Beef prices in the U.S. are at record levels amid a combination of tight supply and strong demand. As of August, ground beef reached $6.32 per pound, marking a 13.9% increase year-over-year, significantly surpassing the overall inflation rate of 2.9%. This surge in prices is influenced by a long history of low cattle prices, increased costs for raising cattle, and prolonged droughts that have resulted in ranchers shrinking their herds to the lowest numbers since 1951. Consequently, live cattle futures have experienced a rise to $243.58 per hundredweight.
Ranchers are hesitant to expand their herds due to past experiences—when prices peaked in 2014, many rapidly increased their cattle counts, only to face a market collapse shortly after. Currently, they are benefiting from higher sales prices, leading some to sell high-priced heifers to manage debts rather than reinvest in herd growth. This cautious approach is echoed by ranchers like Brett Kenzy from South Dakota, who noted a lack of confidence in the market.
Adding to the supply challenges, the U.S. imposed restrictions on cattle imports from Mexico to contain the spread of the New World screwworm, which further tightens the domestic beef supply and affects national prices. Major meat processors, including Tyson and JBS, report declining profits due to the cattle shortage.
Consumer preferences also play a role as demand shifts toward higher-quality beef cuts, necessitating grocery stores to stock less of the cheaper grades. With 16% of U.S. beef imports coming from abroad, recently imposed tariffs—particularly a significant 50% tax on Brazilian beef imports—may also inflate prices for consumers.
Despite the soaring prices, consumer demand remains strong. Restaurant owners have raised their prices significantly yet maintain their beef offerings as prime sellers, even though margin pressures are evident. Observers note the risk of “demand destruction,” particularly in the event of an economic downturn, which could change consumer purchasing behavior.
Source: https://www.theguardian.com/food/2025/sep/27/beef-and-cattle-prices-record-highs